The majority of financial institutions prioritise digital banking transformation, while real development lags at many of them. With the economy uncertain, banks and credit unions must not retreat deeper, but rather redouble their commitment to measures that will provide positive results fast and at scale.
Banks and credit unions are attempting to keep up with consumer expectations, which have drastically changed the way individuals conduct banking. To remain competitive, financial institutions must evolve from the inside out, from the establishment of new deposit and loan connections to the manner in which payments are handled. Beyond iterative product development, innovation at both speed and scale is more crucial than ever, as non-bank businesses educate consumers on what is possible in a digital age.
Here are the banking trends that require your attention for the rest of the year and will position you for a successful 2023.
1. Generation Z is just too valuable to overlook
If your bank hasn’t already, it’s time to start investing in Gen Z marketing (individuals born after 1996). Their future financial power and propensity to spend should not be underestimated. GenZ is more involved than any prior generation in making financial decisions for a more secure future. They’ve gone through the 2008 crisis and a pandemic, so it’s no surprise they’re looking for financial security.
Think about what matters most to them—the geopolitical and socioeconomic concerns that affect their lives, as well as the uncertain financial futures they face—to win their attention and loyalty. These are platforms for developing honest messaging that will resonate.
2. The metaverse is taking place. It’s time to confront the tendency
According to McKinsey, metaverse worlds might have a $5 trillion impact by 2030. In the first five months of 2022, brands invested more than $120 billion in the metaverse.
Banks may be sceptical of the metaverse’s genuine potential, but given the brands that have invested in it and the technological advancements promised, it would interest every bank to at the very least assess its viability against long-term growth goals.
There are various reasons why banks should consider the metaverse:
Future client base: We discussed the need of attracting Generation Z. The following generation, Generation Alpha (those born between 2011 and 2025), should also be on your radar. They will be the wealthiest, most educated, and technologically proficient generation in history, and they will establish bank accounts in only a few years.
Gamification: Just as Web 2.0 forces every brand and corporation to become publishers, Web 3.0 will compel every brand into the entertainment space. Although entertainment is a new trend for banks, you should expect it to boost future engagement.
Brand Image: Early adopters are perceived as inventive, cutting-edge, and ahead of the curve—qualities that people seek in their financial institutions.
Customer service: Face-to-face virtual encounters will provide customers with unprecedented levels of convenience while helping banks move away from an FTE in-branch approach.
Virtual Banking: The meta-verse promises that “what’s old is fresh again.” Consider clients who have only interacted with you online/in-app displaying their digital faces in your virtual branch. Return to the world of customer intimacy and relationships.
3. The foundation of acquisition and retention is social media storytelling
Consumers are more sceptical of brands than ever before. It’s time to do some serious soul-searching for your brand. Do you believe your current and future customers have faith in your brand?
Banks must look beyond marketing posts to develop a story approach in which moments are strung together, connected across channels, occur over time, and are presented honestly.
4. Artificial intelligence is not the future; it is here and now
As smart technologies and artificial intelligence (AI) become more popular among consumers, banks must identify investment-worthy use cases for technological developments. However, the technique to getting started is not based on technology; looking at Bank of America’s Erica and attempting to mimic their strategy will just leave you in the dust (and broke). Begin by identifying your pain points.
AI is being used by banks to address issues such as risk management, credit card fraud detection, cybersecurity, new product development, customer service, client acquisition, and employee attrition.
AI is being used by consumers to access and manage their accounts. The introduction of Robo advisers, 24/7 support, automated account notifications, and the incorporation of natural language processing (NLP) text/SMS services are all part of the revolution.